Terra’s plan for a blockchain PayPal alternative gets $32m from top crypto exchanges

Photo credit: Terra

Mainstream adoption. It’s the most significant challenge faced by cryptocurrencies. As cynics are wont to say: It’s all very well to have dozens of different digital tokens sitting in your digital wallet, seesawing in supposed value. But what’s the point if you can’t actually use them to buy anything?

Many a startup has claimed to be the one that will make cryptocurrency go mainstream and turn tokens into an everyday payment method.

Terra arguably stands out from the crowd, if only because of the amount of funding it has raised and the investors it has on board. Big-name partners have also signed up to its crypto-payment solution, which Terra bills as a blockchain-based replacement for the likes of PayPal and Alipay on online stores.

We are designing our product so that [shoppers] won’t even realize that they are paying with cryptocurrencies.

“We strongly believe that paying with cryptocurrencies shouldn’t be different from any other checkout experience, if not more convenient,” Terra co-founder Daniel Shin told Tech in Asia. “We are designing our product so that when people select Terra as a payment option at checkout, they won’t even realize that they are paying with cryptocurrencies.”

The South Korea-based startup – which is pushing for its crypto-based payments system to be adopted by ecommerce portals – has secured US$32 million in seed funding from a roster of prominent investors.

Among them are the venture capital arms of four of the world’s six biggest cryptocurrency exchanges by trading volume: Binance Labs, Huobi Capital, OKEx, and Dunamu & Partners – an affiliate of Upbit operator Dunamu.

Several blockchain-focused VC firms joined the round, including Polychain Capital, FBG Capital, and Hashed. More traditional VC players like TransLink Capital also participated.

Terra did not say what portion – if any – of the funding resulted from the sale or commitment of tokens when asked by Tech in Asia. However, the startup said it would be using the seed capital to launch a “price-stable” cryptocurrency, also named Terra, which will be the basis of its payments platform.

The stablecoins will save themselves

The Terra token is a “stablecoin” – a digital currency designed to avoid the wild price fluctuations and investor speculation that have come to be seen as hallmarks of mainstream cryptocurrencies like Bitcoin and Ether.

For many prospective users, this volatility makes Bitcoin, Ether, and other tokens unsuitable for everyday uses like online payments.

See: Why crypto payments are too complicated for ecommerce giants like Alibaba and Amazon

Stablecoins are directly backed by an underlying asset. These assets can include fiat money, gold, or other cryptocurrencies. One of the most widely recognized examples is Tether, which is meant to be pegged to the US dollar.

Big-name partners